Airing DirecTV pay dispute on local news not so disloyal, under NLRA, to justify firing

By Lisa Milam-Perez, J.D.
Acknowledging the tensions between employees’ right to engage in protected, concerted activity and an employer’s need to rid itself of disloyal employees, a divided D.C. Circuit panel upheld the NLRB’s conclusion that DirecTV installation technicians did not lose the protections of the Act by airing their dispute about a new pay-docking policy on the local news. Substantial evidence supported the Board’s finding that the employees’ actions were not "flagrantly disloyal" or "wholly incommensurate" with their underlying grievance, and that their comments to the media were not "maliciously untrue." (DirecTV, Inc. v. NLRB, September 16, 2016, Srinivasan, S.).
The big question dividing the panel was whether, under circuit precedent, an employee’s subjective intent should act to shield a seemingly disloyal third-party appeal merely because it was related to a genuine labor dispute. On this, the majority said the Board could permissibly consider intent, and to find that the employees had merely sought to win over viewers to their cause—not to induce them to cancel their satellite service or to "unnecessarily tarnish their employer."
"The court upholds the Board’s determination that the NLRA requires employers to suffer insubordination and damaging falsehoods in silence unless they can prove the employees’ vindictive mental state," Judge Brown wrote in dissent, adding that the case "demonstrates the lengths to which the Board will go to contort an evenhanded Act into an anti-employer manifesto. Instead of attempting to balance conflicting interests, the NLRB reacts like a pinball machine stuck on tilt; reflexively ensuring employers always lose a turn."
The disconnect. The technicians, who worked for a DirecTV installation contractor, protested a new policy under which they would be "back-charged" $5 for each customer installation they performed without connecting the receiver to a phone line, if they failed to connect at least half of the receivers they install over a 30-day period to a phone line. (DirecTV was pushing hard to gets its contractors to install land-line phone connections for customers so that they could take advantage of additional functionality, and the company was falling short in this regard. Feeling the heat from DirecTV as a result, and getting docked under the contract unless it hiked up its numbers, the company put the pressure on its installers.)
But the technicians found it very difficult to convince customers of the wisdom of connecting the receivers to a phone line. When they voiced their concerns to management, the company refused to budge; instead, it offered some sales techniques they might try. Mainly, they were instructed to "do whatever it takes" and tell customers "whatever you have to tell them" to get their assent. One manager, in jest, suggested they tell customers that the receivers would "blow up" if not connected to a phone line. But these tips failed to avert a loss in pay under the policy. So the technicians called the local news and spoke to the station’s consumer affairs reporter, who agreed to feature their plight on TV. After telling viewers that they were essentially being forced to mislead customers in order to avoid getting their pay docked, the technicians were fired, and they filed unfair labor practice charges with the NLRB.
NLRB: discharge unlawful. The Board found the company violated the Act by discharging the technicians. It deemed their participation in the TV interview protected, concerted activity under the NLRA. The technicians only went to the TV station after repeated attempts to resolve the dispute with their employer directly, the Board noted. And, while the newscast "shed unwelcome light" on their employers’ business practices, the technicians’ comments were clearly related to their underlying grievance. Moreover, their televised comments were not so disloyal or "maliciously untrue" as to fall beyond the bounds of protected Section 7 activity.
In a lengthy opinion tracing the relevant caselaw—from the Supreme Court’s 1953 Jefferson Standard decision, from which the Board’s two-pronged Mountain Shadow Golf test was sprung, to the circuit court’s own precedent in George A. Hormel & Co. v. NLRB—the D.C. Circuit held substantial evidence supported the Board’s conclusion that the technicians’ conduct was protected. And, finding that conclusion was in accord with controlling law, the court enforced the Board’s order.
The test: does intent count? When employees make third-party appeals in a bid to win support for their cause, the conduct is protected so long as their communications: (1) indicate that it is related to an ongoing dispute with the employer; and (2) "is not so disloyal, reckless or maliciously untrue as to lose the Act’s protection." Communications cross the line to unprotected terrain when they are "flagrantly disloyal" and "wholly incommensurate" with the employees’ stated grievances. The companies did not dispute that this NLRB test was the correct standard to apply. Also, there was no dispute that the interview segment related to the technicians’ pay grievance. Thus, only the second prong was at issue here.
Where does the employees’ intent factor in? That’s where the rift emerged between the majority and dissent. The Board in this case had pointed out that there was no evidence the technicians intended to cause customers to cancel their service; rather, they appeared to be acting only to gain the public’s support for their cause. The respondent companies, along with the dissent, argued that the Board’s deliberations were inconsistent with the D.C. Circuit’s analysis in Hormel, which found the NLRB had erred when, in addressing whether his conduct amounted to (unprotected) disloyalty, the Board focused on the employee’s actual intent behind his actions, rather than on what a "reasonable observer" might infer from those actions. Here, the companies argue that the Board similarly erred by taking into account as one consideration whether the technicians, in participating in the newscast, "intended" to cause consumers to cancel their service.
The majority was not persuaded, distinguishing the case at hand by noting that in Hormel, the issue of intent arose in the context of whether the employee had engaged in the disloyal conduct in the first place. Here, the Board assumed the technicians did engage in the conduct at issue; the question then became whether that conduct rose to the level of "flagrant disloyalty." Hormel bars (or did not address) consideration of intent as to the former question, but not when analyzing the second question. "And once we accept, as our precedent compels, that disloyalty alone is not enough to remove the Act’s protections in the context of a third-party appeal," the majority found the Board could permissibly consider the employee’s intentions as shedding "meaningful light" on the question whether the technicians’ third-party appeal was "wholly incommensurate" with their grievance. "The Board thus could consider an actor’s state of mind to bear on whether the degree and nature of his disloyalty warrants denying him the Act’s protections even though his appeal relates to an ongoing grievance."
Not "maliciously untrue." Next, the appeals court held there was sound basis for the Board to conclude that the technicians’ statements to the media were not "maliciously untrue" but rather, "for the most part," were accurate reflections of what management had instructed them to tell customers. While the nuances of those instructions, and of the finer details of the challenged pay policy, appear to have been left on the editing room floor, any "arguable departures from the truth" were mere "good-faith misstatements" and not "malicious falsehoods," the Board properly found.
Also, there was no merit to DirecTV’s claim that even if the technicians had a right to criticize their direct employer, they had no right to drag its name, as the contractor’s customer, through the proverbial mud. DirecTV was a statutory employer and the respondent had not argued otherwise. "If nothing else," the appeals court added, DirecTV committed an unfair labor practice by causing its contractor to terminate its employees.
Dissent. Deeming it "not even a close case," Judge Brownissued a lengthy dissent, finding "damning lies" and public disparagement on the employees’ part. "It’s not hard to see why the technicians resorted to these manipulative gambits: an ordinary labor dispute would not be newsworthy, but tales of corporate perfidy and consumer fraud would undoubtedly pique the interest of Channel 6 and the viewing public," Brown wrote. "Still, self-interest does not excuse mendacity, and [the contractor] acted well within its rights when it fired these disloyal technicians."
In her view, the majority had dislodged the Board’s test for what is considered dischargeable disloyalty, eviscerated circuit precedent in holding that the technicians’ actions were not disloyal or "maliciously untrue," and undermined Supreme Court precedent and the NLRA itself. Under Hormel, the NLRA demands an objective test for employee disloyalty, she insisted, and the majority’s take on its prior holding "renders this once-vibrant precedent a mere rain shadow to the mountain the majority would have employers climb."
Indeed, the Board’s opinion below was "virtually indistinguishable" from the decision that the circuit reversed in Hormel she argued; yet, on the other hand, the majority took great pains to draw an "irrelevant distinction" between Jefferson Standard and Hormel.
There was much more to the 25-page dissent. Suffice to say that as Brown saw it, when balancing employees’ right to engage in NLRA-protected conduct with the countervailing right of employers to fire disloyal employees, the NLRB and her colleagues had broken the scale.

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